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Cover Letter From Lester Ludwig, President H.M.D. Corporation 6589 Rosemoor Street Pittsburgh, PA 15217 Cell: (412) 758-1111; Tel.: (412) 421-1038 Date November 5, 2004 To: Eugene Ricciardi, President Pittsburgh City Council 534 Grant Street Pittsburgh, PA 15219 Re: Taxation and the City Relationship to State Government Dear Mr. President: At this critical juncture, in the midst of the rush to be ready for tomorrow's meeting, I Write to propose a soution that will, in my view, open many better opportunities than just changing names and percentages of taxes. The current plan is based on business as usual and really fails to bring a new order to statewide and local union management relationships. A new approach that takes the weight off the budgetary shoulders of the largest cities in our state in needed desperately. This new revenue stream that I am proposing will put Pittsburgh in the black and reduce the size of Philadelphia's problem. The solution has to be good for both cities, as we need Philadelphia votes and willingness to succeed in legislative changes that will be necessary. Solution: :1. Under State Law 72-5-502 "Imposition and Disposition parallel citation 72 P.S.,S7902, enclosed, our state imposes and disposes of taxes on insurance companies, as indicated by the additional enclosure from the Department of Revenue yearly and in this case, a total of $558,508,000 -- for the period of 7/1/02 to 6/30/03. :: a. Imposition ::The taxes are collected from casualty and fire insurance companies, based on 2% of gross premiums. Why only companies whose home offices are outside the state are so taxed rather than both those inside and outside of Pennsylvania, I do not know. ::b. Disposition ::Those collected from fire insurance companies are distributed for fireman's relief pension or retirement while those from casualty companies are used for police pension, retirement or disability. What is a fair tax -- one which is collected from a majority of our population and used for the benefit of the greater welfare of communities or commonweal of the population of our state. Our problem has been and still is our current year's fire budget, 75 million and 2005 - 65 million and the relation of the Fireman's Union to the administration and City Council. If we can get legislative approval for an increase in percentage that would permit all fire protective costs for Pittsburgh and Philadelphia (Class 1 and 2 cities), at least Pittsburgh would no longer be as burdened and a new look could be taken at the parking, tax, which if reduced or eliminated, would in my view foster a wealth of developers descending to compete for the development of the Fifth Avenue Corridor with the attendant sale of U.R.A. held properties at 100 plus cents on the dollar and possible liquidation of holdings of U.R.A. unlocking those R.A.D. funds that are paying for U.R.A.'s bonds. There are any number of scenarios that could follow: #. Make an authority out of the Fire Department, giving them liquor and gambling licenses for fund raising, so that they are less likely to press on future administrations for pay increases. #. Let them acquire at an agreed cost all fire stations and equipment. #. By carefully dividing the increase from 2 to 4% could the real estate tax increases be averted, etc. Let's stop and look at the cost to you and I, as home owners. my policy costs $500 per year and would go up to $510 with a 2% increase. Look at the good, but limited costs this increase can bring to Class I (Philadelphia) and Class II (Pittsburgh) cities in our state. Happy Hunting on Tuesday. Sincerely, Lester Ludwig P.S. When will I receive a contract under Act 47's report dealing with "Market Based Revenue Opportunities (art advertising locations)? Links * Taxation * Les Ludwig Blog mentions * November 13, 2004, Les calles to Jack Shea * November 7, 2004, Ideas On Fire Ludwig